[jumbopapa]

I recently read The Snowball: Warren Buffet and the Business of Life and a lot of that book focused on newspapers. Buffet delivered papers as a boy, had a big legal battle to buy a local Buffalo, NY paper, won a Pulitzer at the Omaha Sun for coverage of a scandal at Boys Town, and he was very close to Kay Graham of The Washington Post. I'm sure this was an emotional decision for him.

[aantix]

He definitely invests in what he’s familiar with.

Which is why it perplexes me when tech people are so diversified with their holdings, there’s little opinion built in.

You have a competitive advantage. You see the tech tools that are utilized every day in your offices. You can understand neural networks and whether Tesla’s auto pilot OS technically reasonable.

You have the knowledge and skills to properly assess tech companies and their products.

You’re an insider in some respects.

Make an assessment, place your bets.

[6gvONxR4sf7o]

My ability to understand facebook's stack doesn't help me understand whether tiktok will eat their lunch, or whether the government will break up facebook and instagram.

At the stage where tech companies aren't behemoths like that, they're waiting longer and longer to go public. Uber, the poster child for this generation of startup investing, waited until it was a $60B company before it went public. Maybe it's easy as a company to get private investment in the cases where my insider's expertise would help me.

My ability to see that full self driving wouldn't be here by 2020 and that Musk's timelines were hype-fueling B.S. doesn't help me with tesla stock, which went way up regardless.

I think netflix, as it currently exists, is on the way out. But that's a long term bet. Not only can the market stay irrational longer than I can stay solvent, netflix can make changes and turn shit around on that time scale. My informed opinions about the macbook don't help me predict the invention and success of the iphone.

Maybe I could use my expertise for investing if I made investing my full time job, but I have one already, and it probably pays better than whatever I'd earn gambling. What's a reasonably reliable amount to beat the market by in your mind? A few percent? Is a few percent worth giving up a $50k-200k/yr promotion by devoting those same efforts to getting better at my day job? Is a few percent worth investing in my industry so that my portfolio losing value becomes even more correlated to my home losing value and more correlated with losing my job?

Hell, when I vest stock at work, where I'm literally an insider, I immediately sell during open trading windows. It has exactly zero to do with how I feel about my company and everything to do with wanting to hedge my wealth and my employment against each other. A.k.a. diversification.

[TimPC]

Most tech people know very lot about very little. Most programmers know next to nothing about neural nets. Most neural net researchers know very little about self driving cars. Most self-driving car researchers are experts in incremental changes and know very little about what grand breakthroughs are likely in the next 2-3 years. To give you an idea, most go players and most AI researchers were shocked by AlphaGo. The expertise didn't help.

I think for technologists in particular expertise can be very dangerous as we tend to think we know a lot more than we do. Predicting the feasibility of an autopilot on a 1-2 year time horizon is a highly specialized difficult analysis. It's definitely not close to something most tech people can do well.

[marvin]

Is it true that most AI researchers were shocked by AlphaGo? These are the people who say it's impossible we'll get some qualitative breakthroughs yielding human-level or super-human general intelligence in the next few decades.

So if the majority of the group is that shocked by an incremental improvement, it would be better if we just interpreted their long-term forecasts as meaning "no idea" instead.

[6gvONxR4sf7o]

It would be best to interpret most long-term forecasts as meaning "no idea" instead. This goes for all groups, not just just ML researchers. Now, they have a little edge, and a big edge in the short term, but it's closer to "no idea" than anything else in the long term.

[afthonos]

It’s quite true. A take I found insightful (I think it might have made the top page when it was first posted):

https://intelligence.org/2017/10/13/fire-alarm/

[BeetleB]

I've found that extremely few folks benchmark their active investments with alternatives (e.g. S&P 500). Not only that, they don't even analyze their own investment performance. Most people I know who've bought stock in a particular company have no idea in the long run how well that investment has done, beyond simple things like "Very well" or "decent".

I work in a tech company. And almost everyone I know who works there is continually surprised at the stock price. They're surprised when it goes up when there's no seemingly good reason for it to do so, and they're equally surprised when it goes down.

While some may have the skill to analyze and predict, it's safe to say that most people - tech folks included - do not.

[autokad]

I have done it as a sanity check and so far have beat SPY. Its kinda hard to calculate though. In TD Ameritrade, it doesn't give you that metric for you (that I know if, if you know how please let us know!). I have to look at the day I bought each stock and compare it against the price of SPY the same day.

It's not 100% because I don't compare against SPY the same exact time I bought the stock (too much work) and I don't bother calculating dividends. I just assume I am doing better there since I have a higher yield than SPY.

I do better than the market, but I don't recommend people trying to do so for money. I do it as a hobby, its fun for me. Otherwise a person's time is worth putting elsewhere, except in one area. While a person might not be able to beat the market, by being engaged they are more likely to invest more and avoid fruitless spending.

When someone spends 1000$+ on a handbag, I think gee, I'd rather have a share of google instead

[sgerenser]

The worst part is, even the ones that DO benchmark against the S&P500 or similar are almost always doing it wrong. I have a friend who owns TSLA stock. Of course it has done much better than the S&P over the past several years, so he thinks "it's easy to beat the market, especially if you know a lot about tech." But he's comparing just that ONE investment, not his entire portfolio of other (many failed) investments, weighted by dollars. I know he put a bunch of money on a couple of altcoins and probably several other losing stock picks, but he never talks about any of those other investments.

[arbitrary_name]

More importantly (and what you're kind of alluding to) is the RISK - sure, Tesla is beating the SP500 - but how about a week from now, or a year? He is taking on significantly more risk compared to someone who just holds the SP500 - that's fine if it matches your risk appetite, but most people fail to consider the other side of the risk/return coin.

Likewise, a good understanding of the overall portfolio is key - and not just investments. For example, if you work at Tesla and hold mostly Tesla shares you are running an even higher risk than the average Tesla investor - the risk of you getting laid off is closely tied to Tesla shares tanking - and failing to diversify away that risk can hit many of us very, very hard.

[nabla9]

> You can understand neural networks and whether Tesla’s auto pilot OS technically reasonable.

The problem with people you describe is learning to do the other half of the company analysis.

There was recently post in HN "Tesla races past $100B in market valuation" : https://news.ycombinator.com/item?id=22118913 People gave good reasons why Tesla has good tech, good cars etc. None of those arguments were tied to price range. They would be just as valid for $100B, $500B or $1T valuations.

[TheCoelacanth]

Compared to people whose full-time job is to analyze tech companies for whether they are good investments, I think most tech people know relatively little.

I could certainly pick out which tech companies are likely to succeed better than my grandma, but I'm not competing against her, I'm competing against professionals, and I simply don't have enough time to match someone who spends their entire day on it.

[vb6sp6]

> Which is why it perplexes me when tech people are so diversified with their holdings, there’s little opinion built in.

This is a strength, not a weakness. It protects against assumptions and biases in opinions.

> You have a competitive advantage. You see the tech tools that are utilized every day in your offices. You can understand neural networks and whether Tesla’s auto pilot OS technically reasonable.

The people I personally know in tech are mostly not located in sv and dont work with hot new shit. They are doing LOB programs for businesses. Smart people but i wouldn't be asking them about Neural Nets

> You’re an insider in some respects. Make an assessment, place your bets.

Most people really aren't

[shrikant]

User 'nullc made a good point the other day on the "Anatomy of a scam" thread:

> Honestly, I think being "tech savvy" is a liability. Someone who doesn't think they're tech savvy knows they don't know. It takes a certain level of expertise to talk yourself into something extremely dumb.

https://news.ycombinator.com/item?id=22169680

[Rooster61]

He also tends to avoid stocks with volatility. And tech has historically been relatively volatile.

As a software engineer, I also tend to not invest in big tech companies. YMMV though.

[aantix]

Why is that?

Why avoid a Apple, etc?

[munchbunny]

If you work in tech and get compensated with tech money and hold tech stocks as part of your compensation, then your net worth is already tied in a substantial way to tech as an industry. Buying more tech stock increases how much your net worth will swing based on tech industry trends.

Bigger risk, bigger returns. Oftentimes risk is opposite of the goal.

As long as you're aware of the interlinked nature of tech stocks in the tech industry, then by all means buy more, but if you're planning for retirement and you don't have a nest egg that's invested on lower risk with more modest returns, you might want to think twice about putting more eggs in the tech basket.

[jressey]

So many people think there is a way to beat the market but no one outside of a handful have over the course of their life.

I just sat in a stand-up listening to my peers talking about making $20 or $60 on an Apple or Nvidia trade they made, and I'm like dudes you can make thousands in dividends a year and hardly look at your portfolio.

This is just straight naive, please do not bet on stocks based on your 'inside information.'

[rconti]

Maybe "tech people" are smart enough to realize that, on a macro level, tech moves together. By diversifying out of their area of expertise, they limit their potential upside but presumably they're hoping to limit their downside exposure. Unless I misunderstand your .. perplexion.

[OJFord]

You could make the opposite argument too - our livelihoods are already wrapped up in the industry; so hedge your savings in others.

(Personally I favour diversifying with funds across countries and industries; plus a bet on a particular share, mostly tech for your reasoning, here and there.)

[MiroF]

This is not good financial advice. Invest out of the sector you work in

[misiti3780]

I read that book too and is it just me, or could it have been like 400 pages smaller? I felt like it had so much useless information in it.